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Tungsten Market Analysis 3-23: Difficult to find support points, market prices quickly fall

In the past week, the price of tungsten has dropped rapidly, and it is not an overstatement to describe it with a "slump" vision. Of course, if rational analysis is such an irrational shipment, we can see a lot of helplessness. Objective factors cannot be avoided, and no one can anticipate the global outbreak of the new crown epidemic, and the chain effect brought by this outbreak will further weaken the weakened global economy.

The outbreak, the reduction in oil consumption and the sharp decline in crude oil prices are all objective factors. The superposition of these objective factors has caused people in all walks of life to worry about the future economy. This fuse of US stocks in 10 days 4 illustrates a certain problem. The combination of all these factors has caused many inventors in the tungsten market to sell off. The price of tungsten has fallen sharply in a week. The last time such a rapid decline occurred was in July last year.

This round of market loosening is still starting with tungsten ore and APT. Compared to other products, these two product markets have more capital ¡°players¡±. At the beginning of March, there was a change in the tungsten ore market. Some manufacturers took the lead in shipping after the last round of rally, but the initial shipment was relatively rational. The initial shipment was only tentative. During this time, whether it was tungsten sand or APT still has a small number of transactions, and the market took a sharp turn around March 10th. At that time, U.S. stocks had just experienced a meltdown and the global financial market was in a slump. The outbreak of the European epidemic was also at this time.

Frequent negative factors have led to panic among many manufacturers, coupled with the fact that the demand side has shown no signs of improvement, and the export market has a slim future. Hedging of some long-stored inventory. The consequence of such shipments is to cause downstream companies to be cautious in taking orders.

For large tungsten companies, because of the long order, the time for quotation and purchase is relatively fixed, which makes the goods purchased by the long order manufacturer will soon become high-priced raw materials. If there is no matching order, Then you may face a decrease in profits or even losses, and the way to reduce the risk is to hedge higher prices with lower prices in future long-order purchases, or reduce purchases in future purchases. There are already large tungsten companies this month. The quote proves it. For small and medium-sized enterprises, the procurement of bulk cargo is relatively flexible. At this time, if there is no special need, it will not be purchased.

In more than a week, the price of tungsten sand (55 grade) dropped from 90,000 yuan / ton to 82,000 yuan / ton, while the price of APT dropped from 140,000 yuan / ton to less than 130,000 yuan / ton, but the transaction It is still rare, and the faster the price drops, the more there will be no transactions, which is obvious. Now it's not a matter of price, it's a matter of order. Downstream manufacturers want to keep inventory as low as possible. Because it is judged that there will be no shortage of supply or a sharp rise in prices in the subsequent APT, many manufacturers who buy goods have decreased. Your own purchase volume, or at least wait for your own product order to improve. Therefore, the recent selling pressure of APT is still relatively large. Although Luomo Group has stated that it will no longer sell its inventory other than its own products in the near future, according to the current purchase situation of downstream companies, it is difficult for other manufacturers to sell the goods happily. For a smelter, all it can do is wait.

Tungsten powder is weak, there is basically no market, and the price is also chaotic. Because there are few downstream inquiries, many companies have expressed that it is not significant for external quotations. For some manufacturers, the tungsten carbide reference price is 210-212 yuan / kg. The price of flour is 213-215 yuan / kg, but the transaction at this price is basically impossible.

More than one powder alloy factory said that the current order in April is not ideal, and downstream orders have been delayed. Whether it is delayed due to price or poor demand, it is difficult to say at present. I believe that there are two factors, but as domestic The epidemic has eased, and the consumer side will also recover. How likely is it that there will be a cliff-like decline in domestic demand? In short, the fact is that the new orders received by the powder mills are indeed very small, so it is not meaningful for them to lock in APT.

There is also no good news in the international market. Affected by the outbreak of the global epidemic and the chaos of the financial market, foreign tungsten companies have insufficient confidence in the later stage of the market, and their attitude is mainly bearish. Recently, the transaction volume has decreased. Most of the transactions in European and American countries are based on spot, and many manufacturers have already purchased in February. It now appears that the epidemic in Japan and South Korea has been effectively controlled, and future demand in these two regions is likely to recover.

According to a domestic exporter, there are basically no orders in foreign countries recently. The focus of European companies' work has shifted to epidemic prevention and control. As long as raw materials do not appear to be out of supply, they will not enter the market to buy goods. News of all tungsten companies stop production. However, because many auto factories and manufacturing-related factories cease production, the consumption of tungsten will inevitably decrease. At this time, if tungsten companies do not stop production, then some products will be converted into inventory.

The view of this website is that, whether in China or in Europe, America, Japan, and South Korea, the true impact of the epidemic is not only on the production of the factory, but also the ultimate impact on consumption. The impact of consumption is reflected in all aspects. At present, It is difficult to estimate, and it will not show up until the epidemic has passed.

In summary, the global panic continues, and the meltdown of US stocks is not new. The Fed's emergency interest rate cut is close to zero, which is enough to prove that the capital market is currently in a period of turmoil and panic. The outbreak of the European and American epidemic casts a shadow over the future global economy, and it is difficult to judge the true impact of tungsten demand. However, in the short term, the influence of market participants' mentality is still negative. Pessimistic expectations and worrying attitudes have caused many manufacturers to hedge their shipments, resulting in frequent low prices in the market. Perhaps the tungsten market also needs this kind of fusing mechanism. When the price drops too fast, stop quoting and wait for it to calm down before making a decision.

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